Bank of America on Wednesday announced a new mortgage home loan program for first-time homebuyers.
As noted by B of A’s press release, blacks and Hispanics are the main focus of their new program.
While it may be true that other races and ethnicities are not technically excluded, the program is explicitly targeting Black and Hispanic to achieve a racial goal.
Certain borrowers will be able to apply for a zero down payment, zero closing cost mortgage with Bank of America’s new lending program in select cities.
There will be zero mortgage insurance (loans over 80% loan to value typically charge borrowers mortgage insurance fee) and no minimum credit score!
What could possibly go wrong?
“Homeownership strengthens our communities and can help individuals and families to build wealth over time,” AJ Barkley, head of neighborhood and community lending for Bank of America, said in a release. “Our Community Affordable Loan Solution will help make the dream of sustained homeownership attainable for more Black and Hispanic families, and it is part of our broader commitment to the communities that we serve.”
Did Bank of America learn nothing from the 2008 housing market crash?
NBC News reported:
Bank of America said it is now offering first-time homebuyers in a select group of cities zero down payment, zero closing cost mortgages to help grow homeownership among Black and Hispanic/Latino communities.
The option will first become available in certain neighborhoods in Charlotte, Dallas, Detroit, Los Angeles and Miami. The new mortgage, called the Community Affordable Loan Solution, aims to help eligible individuals and families obtain an affordable loan to purchase a home, the bank said.
The loans require no mortgage insurance — the additional fee typically charged to buyers who put down less than 20% of the purchase price — and no minimum credit score. Instead, eligibility will be based on factors like timely rent payments and on-time utility bill, phone and auto insurance payments. Prospective buyers must also complete a homebuyer certification course provided by Bank of America and federally approved housing counseling partners before they apply for the loan program, the bank said.
“During the pandemic, rising home prices and low housing supply have disproportionally impacted Black households more than any other race/ethnic group,” the NAR said in a report. White households are now 40% more likely to be able to afford to buy a home compared with Black households, the association said.